How Kinara Capital’s Hardika Shah Was Inspired to Help Small Business Entrepreneurs Dream Big
“When life gives you lemons, make lemonade,” is an age-old adage used to encourage optimism in the face of adversity. For Hardika Shah, founder of the fintech loan market, that has been his mantra all his life.
“Coming from a middle class family, having a blind but ambitious father and an entrepreneurial mother, I have seen a lot of struggles, inspiration and a lot of jugaad since my early years,” says Hardika. “The importance of hard work and education has always been emphasized. Against cultural norms, my parents let my sister and I break down barriers about what is “okay” for girls. “
Today, with Kinara Capital, Hardika is transforming the lives of many women like her and helping them stand up.
Kinara Capital offers unsecured commercial loans of asset purchase and working capital in the range of Rs 1 lakh to 30 lakhs in a 24 hour disbursement cycle. Credit scores are performed using automated, data-driven, artificial intelligence and machine learning (AI / ML) -based credit decision making.
The start-up has pledged to shell out Rs.100 crore in business capital to female entrepreneurs with its HerVikas program which offers an automatic initial rebate to female business owners, without requiring separate documentation.
“We challenge common industry practices, which unfortunately include asking a woman how she runs a household and a business, questions about child care and whether she has ‘permission’ to ask. a business loan to her father or her husband, ”she adds. .
Overall, as part of its mission to bridge the credit gap for MSMEs, Kinara Capital has disbursed over INR 2,000 crore on over 56,000 loans in over 90 urban, peri-urban and rural areas in India. The social impact of their financial inclusion work has led to additional income generation of INR 700 crore for small business entrepreneurs and has led to the creation or maintenance of over 250,000 jobs as claimed. the founder.
To date, they have raised $ 300 million in debt and equity financing from various partners. The startup has also received a lot of recognition and support from leading social impact organizations including Michael & Susan Dell Foundation (MSDF), GAWA Capital, Patamar Capital, Sorenson Foundation, US International Development Finance Corporation (DFC), Impact Investment Exchange (IIX), Blue Orchard, Responsibility and Symbiotic.
In a recent interaction with YourStory, Hardika goes through her life journey, the challenges faced and how she helps Indian women entrepreneurs achieve their dreams. Excerpts edited here:
The first trip
Hardika remembers that her family has always valued entrepreneurial traits like resilience and patience. Her father, who is blind and was born in a small village in Gujarat, has become an accomplished professor of political science at the University of Bombay. Today he continues to teach in the United States. Her mother always had entrepreneurial tendencies, was very active with volunteer groups and ran a few small businesses while Hardika was growing up.
The couple’s strong belief in their daughters led them to sell their house to allow Hardika to continue her education in the United States. It was virtually unheard of in the late 1980s – for a middle class family to make such a huge sacrifice for their daughter.
“So when I was 16, I embarked alone for the United States for my undergraduate studies. Wishing me goodbye at the airport, they reminded me not to be afraid, to be daring, to be true to yourself and to agree to take risks in life because it is ‘is the only way to change things, ”she said.
Hardika chose the then emerging field of IT and a career in management consulting. While working in Silicon Valley, she began taking time for pro-bono mentorship at Stanford and UC Santa Clara programs for social entrepreneurs. She was intrigued by the concepts of sustainable models that prioritize community impact and profitability.
“So I decided to explore new possibilities and took a joint MBA with Columbia Business School and the Haas School of Business at UC Berkeley. And Business School thus became the genesis of the Kinara concept.
Take the path of entrepreneurship
While Hardika believes a lot has changed for today’s generation of women, she feels inherent challenges remain.
“While visiting India and reconnecting with people from my early days, I realized that the difficulties my mother faced in starting a small business were exactly the same two decades later for small entrepreneurs. companies! ”she exclaims. “Economic liberalization had not addressed India’s huge credit gap for MSMEs and as a result, many of them did not have access to the growth of their businesses.
Women entrepreneurs face significant systemic challenges in India at all levels. However, these are more pronounced for women who are also micro / small entrepreneurs. For example,
- less than 14% of all businesses in India are owned by women
- the lack of formalization creates more obstacles for women to access formal finance
- lack of support for childcare, family / household management or eldercare
- those who prefer to speak in the vernacular or have no formal education, there is a lack of information on the basics such as how to register a business or apply for a second KYC
In addition, IFC reports that women entrepreneurs are likely to face higher borrowing costs, provide collateral for a higher share of their loans, and face longer wait times for loans. the disbursement of loans than their male counterparts.
“These additional obstacles are therefore perhaps the reasons why more men are able to start and grow their own businesses, but not enough women are able to move from the role of worker to entrepreneur,” she said. added.
Seeking to fill these gaps, she started building risk assessment models during her business school years and then set up a field pilot project in India which was very successful. This inspired Hardika to close the chapter on her life in Silicon Valley and move to Bengaluru in 2011, with the sole purpose of creating Kinara Capital.
“Years after flying to the US for my undergrad, I was with my parents again to wish me a safe trip – in reverse this time – as I flew to India on my way back. with my whole life packed in two suitcases. Yet they told me the same thing even after all these years – be bold, be true to yourself, and remember that changing the world can only happen if you are willing to take risks for it. to make possible.
The path to follow
India is the world’s fastest growing major economy with over 63 million MSMEs. The World Bank estimated the MSME credit deficit in India to be around USD 300 billion, and that was before Covid! So the demand is massive for small businesses in India to access finance, especially as they try to rebuild and grow this year.
Kinara Capital seeks to leverage this with a three-pillar approach, thereby addressing the access to credit deficit with a lack of information on the user-friendly vernacular digital loan application process by introducing new skills services to Added value for Kinara clients and the gender gap supporting even more female entrepreneurs with our discounted HerVikas program.
Hardika firmly believes that change starts at the top, and for minorities to take a seat at the table, the opportunity must first be created!
“We are therefore one of the few companies to have a predominantly female management team,” she added. Kinara Capital is also a welcoming place to work for the LGBT community and people with physical challenges. Some time ago they also joined forces with the National Association of the Blind (NAB).
“Growing up with a blind father, I appreciate that we find ways to open doors for everyone to have the opportunity to pursue a career in finance. Inclusiveness is one of the core values of our company, and I am proud that our team across regions and departments hold it in high regard, ”concludes Hardika.